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Jack in the Box (JACK)
Q1 2013 Earnings Call
February 21, 2013 11:30 am ET
Carol A. DiRaimo - Vice President of Investor Relations & Corporate Communications
Linda A. Lang - Chairman, Chief Executive Officer and Chairman of Executive Committee
Jerry P. Rebel - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Leonard A. Comma - President and Chief Operating Officer
John S. Glass - Morgan Stanley, Research Division
Brian J. Bittner - Oppenheimer & Co. Inc., Research Division
Joseph T. Buckley - BofA Merrill Lynch, Research Division
Keith Siegner - Crédit Suisse AG, Research Division
David E. Tarantino - Robert W. Baird & Co. Incorporated, Research Division
Jeffrey Andrew Bernstein - Barclays Capital, Research Division
Jeffrey D. Farmer - Wells Fargo Securities, LLC, Research Division
Matthew J. DiFrisco - Lazard Capital Markets LLC, Research Division
Alexander Slagle - Jefferies & Company, Inc., Research Division
Christopher T. O'Cull - KeyBanc Capital Markets Inc., Research Division
Larry Miller - RBC Capital Markets, LLC, Research Division
Howard W. Penney - Hedgeye Risk Management LLC
Conrad Lyon - B. Riley & Co., LLC, Research Division
Jake R. Bartlett - Susquehanna Financial Group, LLLP, Research Division
Previous Statements by JACK
» Jack in the Box's CEO Discusses F4Q 2012 Results - Earnings Call Transcript
» Jack in the Box Management Discusses Q3 2012 Results - Earnings Call Transcript
» Jack in the Box Management Discusses Q2 2012 Results - Earnings Call Transcript
At this time, for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo, Vice President of Investor Relations and Corporate Communications for Jack in the Box. Please go ahead.
Carol A. DiRaimo
Thank you, Marianne, and good morning, everyone. Joining me on the call today are Chairman and CEO, Linda Lang; Executive Vice President and CFO, Jerry Rebel; and President and Chief Operating Officer, Lenny Comma.
During this morning's session, we'll review the company's operating results for the first quarter of fiscal 2013, as well as some of the guidance we issued yesterday for the second quarter and fiscal 2013. And following today's presentation, we'll take questions from the financial community.
Please be advised that during the course of our presentation and our question-and-answer session today, we may make forward-looking statements that reflect management's expectations for the future, which are based on current information. Actual results may differ materially from these expectations based on risks to the business.
The Safe Harbor statement in yesterday's news release and the cautionary statement in the company's most recent Form 10-K are considered a part of this conference call. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q and other public documents filed with the SEC. These documents are available on the Investors section of our website at www.jackinthebox.com.
A few calendar items to note. Jack in the Box management will be presenting at the Bank of America Merrill Lynch Consumer and Retail conference in New York on March 13 and at the UBS Global Consumer conference in Boston on March 14.
Our second quarter ends on April 14, and we tentatively plan to announce results on May 15 after the market close. Our conference call is tentatively scheduled to be held at 8:30 a.m. Pacific Time on May 16.
And with that, I'll turn the call over to Linda.
Linda A. Lang
Thank you, Carol, and good morning. Jack in the Box reported another strong quarter of operating results yesterday that built upon our accomplishments from last year. Let's look at some of the highlights that we reported for the first quarter.
Operating earnings per share more than doubled from the year-ago quarter, increasing to $0.54. Consolidated restaurant operating margin improved 220 basis points to 15.7% of sales. Same-store sales increased 2.1% at company Jack in the Box restaurants and 1.5% at company Qdoba restaurants. And through an ongoing review and refinement of our organization, we're creating a structure that more efficiently supports our new business model.
Focusing on Jack in the Box, our same-store sales growth exceeded that of the QSR sandwich segment according to NPD, which we attribute to the investments we've made over the past few years to enhance our food, service and restaurant facilities. We did not take additional price increases during the quarter, and traffic was roughly flat. On a 2-year cumulative basis, same-store sales were up 7.4%.
The first quarter sales improvement was seen across all dayparts with breakfast and late night, posting the largest year-over-year increases. Our promotional calendar during the quarter featured a balance of media messages, promoting a mix of products that benefited all dayparts, from our Loaded Breakfast Sandwich and Sourdough Cheesesteak Melt to a value-priced Bonus Jack combo and a value offering for chicken nuggets.
Our recent focus on speed of service continued to result in improvement across all dayparts at company and franchise restaurants. Faster service is building trust with our guests, driving additional visits and contributing to the improvement we see in our overall guest satisfaction scores.
Turning to Qdoba. One of our key priorities in 2013 is to drive traffic. We believe our first quarter promotional efforts to differentiate the brand helps to generate the 1.5% increase in same-store sales at company locations, with the improvement driven by transaction and catering growth. Like Jack in the Box, Qdoba did not take additional pricing during the quarter.
Several brand activation initiatives are in various stages of development and execution, including a new brand campaign to drive traffic and sales. The new campaign will focus on more clearly articulating Qdoba's unique brand positioning and innovative menu, which includes craveable items like our 3-cheese Queso. Certain markets featured Queso and a first quarter promotion in which guests could add Queso for free to their burritos. As expected, promotions like these can negatively impact average check, but our goal is to increase frequency and loyalty to the brand.